Since September 2010, the Affordable Care Act (ACA) has allowed U.S. parents to include their children on their private health insurance plans until the age of 26 years. A study published in Contemporary Economic Policy found that this provision is linked with a higher likelihood that young adults live with their parents.
The study examined data from the Survey of Income and Program Participation, a nationally-representative household survey that includes extensive information on household composition, economic outcomes, health insurance, demographics, and participation in government programs. The ACA provision was associated with a 7% to 18% increased likelihood that young adults live with a parent, depending on the data set and specification.
The dependent care provision was intended to address the high rate of un-insurance among young adults. Studies show that the provision so far has been successful, but it may have inadvertently reduced young adults’ flexibility regarding geographic location since living near a parent typically will be needed to stay in the parent’s provider network and take advantage of a parent’s health insurance coverage.
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